Criminal Complaint — United States of America v. Antonio George, Eastern District of Michigan, 2:20-mj-30340

Summary

Criminal complaint with an FBI affidavit, Case 2:20-mj-30340, dated August 28, 2020 in the Eastern District of Michigan, charging Antonio George with wire fraud under 18 U.S.C. § 1343. Special Agent Matthew Sluss describes the Paycheck Protection Program and the Economic Injury Disaster Loan program and says Citizens Bank flagged PPP applications supported by similar financial documents. The affidavit identifies 19 loan applications for $3,118,442, of which 16 were PPP loans totaling $2,668,442 and 3 were EIDL loans totaling $450,000, linked to George as applicant, registrant or account co-signer for entities such as ATX Inc. and Seven Investment Group, LLC. It compares their payroll reports and notes signage reading United Denture Clinic at the Seven Investment Group address.

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Case 2:20-mj-30340-DUTY ECF NoatsJiledQei28i20 PagelD.1 TeRaaAcl Qf0241679-1430
Special Agent: Matthew Sluss Telephone: (313) 919-1327

UNITED STATES DISTRICT COURT

for the
Eastern District of Michigan

AO 91 (Rev. 11/11) Criminal Complaint

United States of America

V.
ANTONIO GEORGE Case No.Case: 2:20-mj-30340
Assigned To : Unassigned
Assign. Date : 8/28/2020
USA V. SEALED MATTER (CMP)(CMC)
CRIMINAL COMPLAINT
I, the complainant in this case, state that the following is true to the best of my knowledge and belief.
On or about the date(s) of 4/19/2020 - 7/25/2020 in the county of Wayne in the
Eastern District of Michigan , the defendant(s) violated:
Code Section Offense Description
18 USC § 1343 Wire Fraud
This criminal complaint is based on these facts:
See Attached Affidavit.

[_] Continued on the attached sheet. Lge WA

Complainant’s signature

Matthew Sluss, Special Agent, FBI

Printed name and title

Sworn to before me and signed in my presence
and/or by reliable electronic means.

August 28, 2020 —--—
Date: vadge 's signature

nalen

City and state: Detroit, Michang R, Steven

Printed name and title

| Save | Print
Case 2:20-mj-30340-DUTY ECF No.1 filed 08/28/20 PagelD.2 Page 2 of 14

AFFIDAVIT IN SUPPORT OF A COMPLAINT

I, Matthew Sluss, Special Agent of the Federal Bureau of Investigation (FBI), being
duly sworn, state that:

INTRODUCTION AND AGENT BACKGROUND

1. I am an investigative or law enforcement officer of the United States within
the meaning of Section 2510(7) of Title 18 of the United States Code. I am
empowered to conduct investigations of and to make arrests for offenses enumerated
in Title 18 of the United States Code.

2. I have been employed by the FBI as a Special Agent since September 2017.
During my employment with the FBI, I have investigated federal crimes including
mail fraud, wire fraud, bank fraud, bankruptcy fraud, and various other criminal
matters. At all times during the investigation described in this affidavit, I have been
acting in an official capacity as a Special Agent of the FBI.

3. This affidavit is made in support of a criminal complaint and arrest warrant
for ANTONIO GEORGE for violating 18 U.S.C. §1343.

4. This affidavit is submitted for the limited purpose of securing a criminal
complaint and arrest warrant; therefore, this affidavit does not contain every fact that
I have learned during the course of the investigation. I have only set forth the facts
necessary to establish probable cause to believe that GEORGE violated the statute

identified above. The information contained in this affidavit is based upon my
Case 2:20-mj-30340-DUTY ECF No.1 filed 08/28/20 PagelD.3 Page 3 of 14

personal knowledge, training and experience, as well as the combined knowledge,
training and experience of other law enforcement officers and agents with whom I
have had discussions.

5. 18 U.S.C. §1343 criminalizes schemes or artifices to defraud, or obtaining
money or property by means of false or fraudulent pretenses, representations, or
promises, when for the purpose of executing the scheme, the person transmits, or
causes to be transmitted, any writings, signs, signals, pictures, or sounds by means
of wire communication in interstate commerce.

BACKGROUND OF THE PAYCHECK PROTECTION PROGRAM

6. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a
federal law enacted in or around March 2020 and designed to provide emergency
financial assistance to the millions of Americans who are suffering the economic
effects caused by the COVID-19 pandemic. One source of relief provided by the
CARES Act was the authorization of up to $349 billion in forgivable loans to small
businesses for job retention and certain other expenses, through a program referred
to as the Paycheck Protection Program (“PPP’’). In or around April 2020, Congress
authorized over $300 billion in additional PPP funding.

7. In order to obtain a PPP loan, a qualifying business must submit a PPP loan
application, which is signed by an authorized representative of the business. The

PPP loan application requires the business (through its authorized representative) to
Case 2:20-mj-30340-DUTY ECF No.1 filed 08/28/20 PagelD.4 Page 4 of 14

acknowledge the program rules and make certain affirmative certifications in order
to be eligible to obtain the PPP loan. In the PPP loan application, the small business
(through its authorized representative) must state, among other things, its: (a)
average monthly payroll expenses; and (b) number of employees. These figures are
used to calculate the amount of money the small business is eligible to receive under
the PPP. In addition, businesses applying for a PPP loan must provide
documentation showing their payroll expenses.

8. A PPP loan application must be processed by a participating lender. If a PPP
loan application is approved, the participating lender funds the PPP loan using its
own monies, which are 100% guaranteed by Small Business Administration
(“SBA”). Data from the application, including information about the borrower, the
total amount of the loan, and the listed number of employees, is transmitted by the
lender to the SBA in the course of processing the loan.

9. PPP loan proceeds must be used by the business on certain permissible
expenses—payroll costs, interest on mortgages, rent, and utilities. The PPP allows
the interest and principal on the PPP loan to be entirely forgiven if the business
spends the loan proceeds on these expense items within a designated period of time
after receiving the proceeds and uses a certain amount of the PPP loan proceeds on

payroll expenses.
Case 2:20-mj-30340-DUTY ECF No.1 filed 08/28/20 PagelD.5 Page 5 of 14

BACKGROUND OF ECONOMIC INJURY DISASTER LOANS

10. The Economic Injury Disaster Loan (““EIDL”) program is an SBA program
that provides low-interest financing to small businesses, renters, and homeowners in
regions affected by declared disasters.

11. The CARES Act authorized the SBA to provide EIDLs of up to $2 million to
eligible small businesses experiencing substantial financial disruption due to the
COVID-19 pandemic. In addition, the CARES Act authorized the SBA to issue
advances of up to $10,000 to small businesses within three days of applying for an
EIDL. The amount of the advance is determined by the number of employees the
applicant certifies having. The advances do not have to be repaid.

12. Inorder to obtain an EIDL and advance, a qualifying business must submit an
application to the SBA and provide information about its operations, such as the
number of employees, gross revenues for the 12-month period preceding the
disaster, and cost of goods sold in the 12-month period preceding the disaster. In
the case of EIDLs for COVID-19 relief, the 12-month period was that preceding
January 31, 2020. The applicant must also certify that all of the information in the
application is true and correct to the best of the applicant’s knowledge.

13. EIDL applications are submitted directly to the SBA and processed by the
agency with support from a government contractor, Rapid Finance. The amount of

the loan, if the application is approved, is determined based, in part, on the
Case 2:20-mj-30340-DUTY ECF No.1 filed 08/28/20 PagelD.6 Page 6 of 14

information provided in the application about employment, revenue, and cost of
goods, as described above. Any funds issued under an EIDL or advance are issued
directly by the SBA. EIDL funds can be used for payroll expenses, sick leave,
production costs, and business obligations, such as debts, rent, and mortgage
payments. If the applicant also obtains a loan under the Paycheck Protection
Program, the EIDL funds cannot be used for the same purpose as the Paycheck
Protection Program funds.

PROBABLE CAUSE

14. In or around June 2020, a representative of Citizens Bank informed the
FBI that several businesses applied for PPP loans that were flagged by the bank’s
underwriting team because the financial documents provided with the loan
applications appeared similar.

15. Subsequent investigative activities conducted by the FBI and SBA
identified PPP and EIDL loan applications that appeared connected either by being
supported with identical or similar documentation or by having a nexus to GEORGE.
In total, 19 loan applications for $3,118,442, of which 16 were for PPP loans for a
total of $2,668,442, and 3 were for EIDL loans for a total of $450,000, were

identified, as follows (Figure 1):
Case 2:20-mj-30340-DUTY ECF No.1 filed 08/28/20 PagelD.7 Page 7 of 14

LOAN LOAN FUNDING APPLICANT'S

BODIE TYPE ENTITY NAME AMOUNT INSTITUTION NAME
04/19/2020 PPP ATX INC $247,900.00 Citizens Bank B.O.

. . . Antonio

04/19/2020 PPP DXX Enterprise, LLC $217,983.00 Fifth Third Bank George
04/29/2020 PPP SFX Transportation.INC $206,100.00 Citizens Bank A.O.

Seven Investment . . Antonio

04/29/2020 PPP Group, LLC $192,140.00 Fifth Third Bank George
05/02/2020 ppp Cabreias ‘es $69,800.00 Citizens Bank SV.
05/02/2020 PPP The Kongo Enterprise $198,100.00 Citizens Bank A.O.

05/07/2020 PPP The Tax Wolf LLC $69,300.00 Citizens Bank Georwe
05/15/2020 PPP Diva Nails & Spa III LLC $193,700.00 Citizens Bank J.H.

Citizens Bank
05/15/2020 PPP Orcas Inc $111,100.00 (Not Funded) F.G.
05/16/2020 PPP S &V Alliance LLC $72,100.00 Citizens Bank S.V.
Express Property Citizens Bank

05/20/2020 PPP Preservation LLC $217,600.00 (Not Funded) U.D.
06/01/2020 PPP Bless My Grind LLC $195,383.00 Kabbage, Inc. K.W.
06/03/2020 PPP Cercle Interieur Inc. $195,383.00 Kabbage, Inc. F.G.
06/03/2020 PPP The Black Wolf Inc. $195,383.00 Kabbage, Inc. AS.
06/08/2020 PPP Defined Jewelry Inc $197,000.00 Citizens Bank AS.

06/25/2020 EIDL DXX Enterprise LLC $150,000.00 SBA Antonio

George

06/25/2020 EIDL © AMGSolutionsLLC $150,000.00 SBA Antonio

George

07/15/2020 EIDL The Tax Wolf LLC $150,000.00 SBA Antonio

George

07/25/2020 PPP AMG Solutions, LLC $89,470.00 _Cross River Bank Georwe

16. GEORGE was a paid employee of ATX Inc., a co-signer on the ATX
Inc. deposit account that recetved the loan funds, and was listed as ATX Inc.’s
Treasurer, Secretary, and a Director. GEORGE was the loan applicant and listed as

the business registrant for DXX Enterprise, LLC; Seven Investment Group, LLC;
Case 2:20-mj-30340-DUTY ECF No.1 filed 08/28/20 PagelD.8 Page 8 of 14

and the Tax Wolf LLC. GEORGE was a co-signer on the deposit account that
received the loan funds for SFX Transportation Inc.; Cabrejas Renovations LLC;
AMG Solutions LLC; and Express Property Preservation LLC. GEORGE was listed
as the business registrant and was a co-signer on the deposit account that received
the loan funds for The Black Wolf Inc.; Orcas Inc; and Defined Jewelry Inc.
GEORGE was listed as a member and was a co-signer of the deposit account that
received the loan funds for the Kongo Enterprise. GEORGE was listed as the
president, treasurer, and was a co-signer on the deposit account that received the
loan funds for Cercle Interieur Inc.

17. The investigation revealed that identical wage information and
employee counts was used in support of several of the PPP and EIDL loan
applications submitted by the entities listed in Figure 1. The entities discussed below
are examples but not an exclusive list.

ATX INC.

18. Your affiant reviewed loan and financial documents provided by
Citizens Bank pertaining to ATX Inc. and noted a PPP loan application was
submitted to Citizens Bank to obtain $247,900 in PPP funds for ATX Inc. The
signing name on the application was B.O., which was signed on or about April 19,

2020. The corporation’s address was provided as 24056 Pilgrim, Redford, Michigan.
Case 2:20-mj-30340-DUTY ECF No.1 filed 08/28/20 PagelD.9 Page 9 of 14

19. The loan amount of $247,900 was funded to Citizens Bank account
x0536 on or about April 20, 2020. GEORGE and B.O. were the signers on the
account.

20. Documents provided with the loan application to Citizens Bank
included ATX Inc.’s 2019 Form 940, 2019 Forms 941 for each quarter of 2019, and
Monthly Payroll Cost report spanning March 2019 through February 2020. The
Monthly Payroll Cost report states “the information in this report is derived from
ADP’s systems and records”; the report is timestamped as generated on April 8, 2020
at 1:23 PM. Your affiant has summarized the information provided in the supporting

documents as (Figures 2 & 3, respectively):

FORM / FIELD INPUT
2019 Form 940 Total Paid to all employees $899,692.57
1Q19 Form 941 Number of Employees 41
1Q19 Form 941 Wages $129,657.50
2Q19 Form 941 Number of Employees 42
2Q19 Form 941 Wages $153,302.50
3Q19 Form 941 Number of Employees 57
3Q19 Form 941 Wages $215,511.40
4Q19 Form 941 Number of Employees 83
4Q19 Form 941 Wages $401,221.17
Case 2:20-mj-30340-DUTY ECF No.1 filed 08/28/20 PagelD.10 Page 10 of 14

MONTHLY PAYROLL COST REPORT
Month Gross Pay Gross Pay in SBA Gross Pay EmployerTaxes — Employer Benefit SBA Payroll Cost
Excess of $100K State and Local Cost
Mar-19 47,662.50 47,662.50 1,286.89 48,949.39
Apr-19 47,000.00 47,000.00 1,725.42 48,725.42
May-19 62,308.50 62,308.50 1,829.47 64,137.97
Jun-19 43,994.00 43,994.00 1,084.60 45,078.60
Jul-19 63,919.00 63,919.00 1,717.20 65,636.20
Aug-19 87,904.22 87,904.22 2,509.82 90,414.04
Sep-19 63,688.18 63,688.18 1,674.13 65,362.31
Oct-19 99,288.45 99,288.45 2,498.25 - 101,786.70
Nov-19 161,041.34 161,041.34 3,234.12 700.00 164,975.46
Dec-19 140,891.38 140,891.38 2,865.09 - 143,756.47
Jan-20 108,707.85 108,707.85 4,196.12 112,903.97
Feb-20 91,071.75 91,071.75 3,515.37 94,587.12
Grand Totals
Total 1,017,477.17 1,017,477.17 28,136.47 700.00 1,046,313.64
Average 87,192.80

21.

Your affiant reviewed documentation provided by the State of

Michigan Unemployment Insurance Agency and noted that ATX Inc. reported Gross

Wages and Employee count for each quarter of 2019 as follows (Figure 4):

22.

FIELD INPUT
1Q19 Number of Employees 41
1Q19 Wages $129,657.50
2Q19 Number of Employees 42
2Q19 Wages $153,302.50
3Q19 Number of Employees 57
3Q19 Wages $215,511.40
4Q19 Number of Employees 83
4Q19 Wages $401,221.17

As such, your affiant notes that the ATX Inc. documentation submitted

in support of its PPP loan application to Citizens Bank appeared consistent with

information submitted to the State of Michigan Unemployment Insurance Agency.

23.

The investigation revealed that GEORGE appeared to be the registered

Treasurer, Secretary, and Director of ATX Inc. GEORGE received wages from ATX
Case 2:20-mj-30340-DUTY ECF No.1 filed 08/28/20 PagelD.11 Page 11 of 14

Inc. in the last quarter of 2019 and first quarter of 2020, and GEORGE was a co-
signer on an ATX Inc. bank account.

SEVEN INVESTMENT GROUP, LLC

24. Your affiant reviewed loan and financial documents provided by Fifth
Third Bank pertaining SEVEN INVESTMENT GROUP, LLC (SIG) and noted a
PPP loan application was submitted to Fifth Third Bank to obtain $192,140 in PPP
funds for SIG. The signing name on the application was ANTONIO GEORGE. The
corporation’s address was provided as 16931 W 10 Mile Rd, Southfield, MI.

25. The loan was dated April 29, 2020, and the loan amount of $192,140
was funded to Fifth Third Bank account x3765.

26. Documents provided with the loan application to Fifth Third Bank
included SIG’s 2019 Form 940, 2019 Forms 941 for each quarter of 2019, and
Monthly Payroll Cost report spanning January 2019 through December 2019. The
Monthly Payroll Cost report states “the information in this report is derived from
ADP’s systems and records”; the report is timestamped as generated on April 16,
2020 at 1:16 PM. Your affiant has summarized the information provided in the

supporting documents as (Figures 5 & 6, respectively):

10
Case 2:20-mj-30340-DUTY ECF No.1 filed 08/28/20 PagelD.12 Page 12 of 14

FORM / FIELD INPUT
2019 Form 940 Total Paid to allemployees $899,692.57
1Q19 Form 941 Number of Employees 41
1Q19 Form 941 Wages $129,657.50
2Q19 Form 941 Number of Employees 42
2Q19 Form 941 Wages $153,302.50
3Q19 Form 941 Number of Employees 57
3Q19 Form 941 Wages $215,511.40
4Q19 Form 941 Number of Employees 83
4Q19 Form 941 Wages $401,221.17
MONTHLY PAYROLL COST REPORT
Gross Pay i Employer T: Employer Benefit
Month Gross Pay eee tele SBA Gross Pay EMA IENES MENS Sane” SBA Payroll Cost
Excess of $100K State and Local Cost
Jan-19 55,657.50 - 55,657.50 1,502.75 - 57,160.25
Feb-19 28,637.50 = 28,637.50 658.11 = 29,295.61)
Mar-19 45,362.50 - 45,362.50 1,285.89 - 46,648.39
Apr-19 43,000.00 : 43,000.00 1,729.42 : 44,729.42
May-19 60,308.50 - 60,308.50 1,829.47 - 62,137.97]
Jun-19 45,994.00 : 45,994.00 1,080.60 : 47,074.60
Jul-19 60,919.00 - 60,919.00 1,719.20 - 62,638.20)
Aug-19 90,904.22 : 90,904.22 2,507.82 : 93,412.04
Sep-19 65,688.18 - 65,688.18 1,678.13 - 67,366.31
Oct-19 106,288.45 : 106,288.45 2,494.25 : 108,782.70
Nov-19 159,041.34 - 159,041.34 3,239.12 - 162,280.46]
Dec-19 137,891.38 : 137,891.38 2,860.09 : 140,751.47]
Grand Totals
Total 899,692.57 : 899,692.57 22,584.85 = 922,977.42
Average 76,856.45

27. It is noted that Figures 2 and 5 are identical because the exact same
wage information and employee counts that were submitted for the ATX Inc. PPP
loan was submitted in application of the SIG PPP loan. Further, characters in red in
Figure 6 are identical to the respective characters in Figure 3, demonstrating the
similarities between the Monthly Payroll Cost Report submitted for the ATX Inc.
PPP loan compared to the SIG PPP loan submission.

28. Your affiant reviewed documentation provided by the State of

Michigan Unemployment Insurance Agency and noted that a Notice of Change form

11
Case 2:20-mj-30340-DUTY ECF No.1 filed 08/28/20 PagelD.13 Page 13 of 14

was submitted for SIG on March 21, 2018, signed by GEORGE. The form indicated
the reason for discontinuance or transfer for payroll or assets in whole or part was
no employees, the last date of payroll was October 31, 2015, and all employment in
Michigan was discontinued. There were not subsequent Notice of Change forms
provided and no quarterly wage report information.

29. Your affiant observed that SIG’s business address of 16931 W 10 Mile
Rd, Southfield, MI displayed signage that read “United Denture Clinic.” No signage
for SIG was observed at the address.

30. The investigation revealed that GEORGE is a member of SIG and is
listed as its registered agent.

CONCLUSION

31. Your affiant submits that there is probable cause to believe that
GEORGE devised and perpetrated a scheme or artifice to defraud Financial
Institutions. In furtherance of and to execute this scheme, GEORGE sent an
electronic loan application and other writings, signs, signals, and pictures in
interstate commerce by means of wire communication, as set forth above.

32. Therefore, your Affiant believes that probable cause exists that

ANTONIO GEORGE violated 18 U.S.C. §1343 (wire fraud).

12
Case 2:20-mj-30340-DUTY ECF No.1 filed 08/28/20 PagelD.14 Page 14 of 14

MATTHEW SLUSS
Special Agent

Federal Bureau of Investigation

Sworn to before me and signed in my presence and/or reliable electronic means on

this 28" fs of Si
ee Whalen
United States Magistrate Judge

Eastern District of Michigan

13


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